Fourth Quarter and Year End Report 2005

www.lindab.com

Fourth Quarter and Year End Report 2005

The Lindab Group´s sales amounted to SEK 6,214 million with an operating profit (EBITA) of SEK 560 million, an increase of 46 percent. The main highlight of the year was the acquisition of Astron Buildings S.A., making Lindab the European leader for prefabricated steel buildings.

2

l indab fourth quarter and year end report 2005

Strong volume growth

Operating profit (EBITA) increased by 79 percent to SEK 174 million (97).

Cashflow amounted to SEK 316 million (238). Continued success with the capital-reduction programme.

Sales for the fourth quarter increased by 34 percent. For comparable units the increase was 14 percent.

Sales and marketSales during the fourth quarter amounted to SEK 1,854 million, an increase of 34 percent compared to the previous year. The increase in sales for comparable units was 14 percent. The acquisition of Astron Buildings has made a positive contribution to sales, boosting them by 20 percent during the quarter. There has been a further strengthening in the Nordic market for most of the product areas. Commercial building, which accounts for most of Lindab’s sales, is making positive progress, and this was a clear trend during the latter part of the year.

Sales in Central and Eastern Europe, which were making poorer progress during the fi rst half of the year, picked up again in the second half with good demand in the market. The Western European market followed the same trend as in previous quarters – demand contin-ues to be poor. Annual sales in 2005 amounted to SEK 6,214 million (5,477 million), which was an increase of 13 percent. If sales are adjusted for acquisitions/divestments, the increase in sales amounts to 8 percent.

ResultsFourth quarter operating profi t amounted to SEK 174 million, which is an increase of 79 per-cent compared to the 2004 profi t of SEK 97 million. Astron Buildings was consolidated as per 1 September and has progressed well, contributing to growth in profi ts. The rest of the business also made very good progress. During the quarter the operating margin was 9.4

percent, which is an increase of 2.5 percent-age units compared with the same period the previous year. Profi t after net fi nancial items increased to SEK 154 million (79 million). Amor-tisation of the intangible surplus value acquired in connection with the acquisition of Astron Buildings began; amortisation amounts to a total of SEK 3 million.

Annual operating profi t for 2005 amounted to SEK 560 million, which was an increase of 46 percent compared to the SEK 384 million of the previous year. Properties were sold during the year for a capital gain of SEK 47 million, and a restructuring reserve of SEK 40 million was entered in the accounts of the Ventilation area. This reserve is intended for a cost reducing program, mainly affecting the production units in Europe and the USA, which will fully feed through in the second half of 2006. Adjusted for one-off items, profi t amounted to SEK 553 million, which is an improvement of 44 percent. Profi t after net fi nancial items increased to SEK 484 million (297 million).

Redemption of sharesAt the beginning of 2006, the Board proposed a

redemption of shares in Lindab Intressenter AB

corresponding to SEK 1,200 million. In conjunc-

tion with this, the Group’s total borrowing will be

refi nanced.

Net liabilities and financial positionNet liabilities – the difference between interest-bearing assets and interest-bearing liabilities – amounted to 1,854 million (1,858 million) as oft the end of December 2005; the equityratio was 43 per cent (43). At the end of December the debt/equity ratio was 0.65 (0.78).Net fi nancial items during the quarter amounted to SEK -17 million (-18 million). Net fi nancial items for 2005 amounted to SEK -73 million (-87 million). The lower net fi nancials fi gures stem both from lower average liabilities and lower interest rates.

Cash flowCash fl ow during the quarter amounted to SEK 316 million compared to SEK 238 million the previous year. Inatherm B.V. was divested dur-ing the quarter, boosting cash fl ow to the tune of SEK 20 million. The work of reducing the amount of tied-up capital is continuing, and this resulted in stock levels declining by an addi-tional SEK 101 million between September and December.

Cash fl ow for the whole of 2005 amounted to SEK 4 million (279 million). Astron Buildings was acquired during the third quarter, and this had a negative impact on cash fl ow amounting to SEK 705 million. A sale and lease-back transaction relating to group properties was also completed in August, reducing net liabilities by SEK 188 million. After adjustment for the acquisition of

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and improved profi tability

Astron Buildings, the sale of the properties and the divestment of Inatherm B.V. cash fl ow from operations amounted to SEK 501 million. The previous year’s cash fl ow amounted to SEK 279 million, when the divestment of parts of Folke in Borlänge boosted cash fl ow by SEK 41 million. 2004 cash fl ow from operations amounted to SEK 238 million. The previous year’s cash fl ow was adversely affected by rising steel prices. The main reason for the improvement in cash fl ow during 2005 is the lower levels of stocks. For comparable units, the level of stocks has been reduced by SEK 238 million.

InvestmentsNet investment during the quarter amounted to SEK 149 million, of which SEK 107 million stemmed from recompiled acquisition calcula-tions for Astron Buildings, SEK 13 million from the divestment of Inatherm B.V. and SEK 55 million from net investment in current business. Total investment for the year amounted to SEK 669 million. Adjusted for the acquisition of Astron Buildings, the divestment of Inatherm B.V. and the property sale and lease-back transaction, annual net investment amounted to SEK 129 million. Investment was made mainly in expansion and maintenance work. Total depreciation and amortisation for the quarter amounted to SEK 50 million (43 million) of which SEK 3 million (0) refers to amortisation in surplus value of intangible assets for the Group. Total depreciation and amortisation for the year amounted to SEK 194 million (185 million) of which SEK 3 million (0) refers to surplus value of intangible assets for the Group.

SALES

MSEK

OPERATING PROFIT (EBITA),

MSEK

Company acquisitions/divestmentsAstron Buildings S.A. was acquired to strength-en our position in the European market for pre-fabricated steel buildings and to create growth in one of the defi ned core production areas. The acquisition makes Lindab Europe’s leading player in the prefabricated steel building area. Geographically the acquisition complements Lindab’s steel building business extremely well. During the last fi nancial year Astron Buildings had a turnover of EUR 115 million with operat-ing profi ts exceeding EUR 9 million. Sales in Central and Eastern Europe have grown dramatically in recent years and now account for approximately 50 per cent of the total turno-ver. Astron Buildings employs a workforce of 650, and has production facilities in Luxemburg and the Czech Republic. The purchase price amounted to EUR 74.5 million, free of debt. The required permit has been obtained from the Competition Authorities and Astron Buildings was consolidated into the group from 1 September.Inatherm B.V. in Holland was sold on 1 Novem-ber. This constitutes yet another stage of the process of focusing on the core product, air duct system product in the Ventilation business area. The divestment had a marginal impact on profi ts, but it reduced net liabilities by SEK 20 million.

PersonnelThe company employed a staff of 4,055 at the

end of the quarter compared with 3,666 at the same time in 2004. The acquisition of Astron Buildings accounts for an increase in staff num-bers of 650. The number of employees in the Ventilation business area declined by 244, a reduction obtained through comprehensive production rationalisation. The greatest impact is being felt in Germany and the USA. Divest-ment of the Dutch company reduced staff numbers by 15.

Accounting policiesLindab´s transition to IAS/IFRS 2005This interim report for the group has been pre-pared in accordance with IAS 34, Interim fi nan-cial reporting. The accounting policies applied in the latest annual report have been altered as a consequence of the application of the IAS/IFRS. In June 2002, the EU Council of Ministers adopted the IAS 2005 scheme, under which, from 1 January 2005, all listed companies within the EU must report and publish their group accounts in accordance with the International Financial Reporting Standards (IFRS), previously named the International Accounting Standards (IAS). The term IFRS comprises the applica-tion of both the IAS and the IFRS. Lindab is not listed but has voluntarily chosen to comply with the IFRS. Thus the present fi nancial report is the fourth one to be prepared in accordance with the International Financial Reporting Standards, the IFRS. Under the transition rules, the com-parative fi gures for 2004 must be reported in accordance with the new accounting policies. For further information see page 11.


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Simplifi ed construction

Lindab develops, manufactures, markets and distributes products and sheet metal system solutions for improving indoor climate and simplifying construction.The company is divided into two business areas: Ventilation and Profi le.

This is Lindab

The Lindab group generated sales of SEK 6,214 million in 2005, is established in 28

countries and employs around 4,000 people.

The Ventilation business area focuses on the ventilation industry, offering everything from

ventilation components to complete indoor climate solutions.

The Profi le business area focuses on the construction industry, offering an extensive

range of building components and complete steel building systems for both residential

and commercial properties.

Principle owners of Lindab Intressenter are Ratos, Sjätte AP-fonden and Skandia Liv.

Products are characterised by their high quality and ease of assembly, while designs aim to be energy saving and environmentally friendly. The products are supplied with high levels of service to further increase their customer value.

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MSEK

Western EuropeCentral and Eastern EuropeUSA

The Nordic region

Profile

MSEK

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Jul-Sep2005

Oct-Dec2005

Lindab Group

During the quarter demand has increased in the Nordic market, and sales grew by

11 percent. Sales grew very strongly in Western and Central Europe. The increased

sales in Western Europe can be explained by the acquisition of Astron Buildings S.A.

Underlying business in Central and Eastern Europe shows very positive progress.

Sales in the USA remained unchanged during the quarter.

Operating profit (EBITA) includes profits after depriciations excluding amortisations in

surplus value of intangible assets for the Group. Other activities refer to shared units

within the group. One-time items include the restructuring reserve within Ventilation of

SEK 40 million and the sale and lease-back transaction for real estate, which genera-

ted capital gains of SEK 47 million.

Defi nitions:1) Operating profi t comprises earnings after depreciation according to plan exluding amortisation of surplus value in intangible assets (EBITA).2) The operating margin has been calculated as EBITA expressed as a percentage of sales during the period.3) Net profi t in relation to number of shares in issue.4) Debt/equity ratio - the difference between net debt - in relation to shareholders´ equity.5) The equity/assets ratio has been calculated as shareholders´ equity as a percentage of total assets as per the balance sheet.6) Profi t of the fi nancial items plus fi nancial costs divided by fi nancial costs.7) Operating profi t is calculated as profi t after tax as percentage of average shareholders´ equity excluding minority interests.8) Profi t after fi nancial items plus fi nancial costs in percentage of average capital employed.9) Operating profi t in percentage of average operating capital.

Cash fl ow from operating activities

Key figures, MSEKJan-Dec

2005Jan-Dec

2004

Operating margin, percent1,2) 9,0 7,0

Earnings per share, SEK3) 351 203

Cash flow, MSEK 4 279

Debt/equity ratio, times4) 0,65 0,78

Equity per share, SEK 2 853 2 369

Equity/assets ratio, percent5) 43,2 43,0

Interest cover ratio6) 6,6 4,1

Return on equity7) 13,4 13,1

Return on capital employed8) 11,4 6,8

Return on operating capital9) 11,9 9,1

Shares in issue 1 000 000

Operating profit by business area (EBITA), MSEK

Oct-Dec

2005

Oct-Dec

2004

Jan-Dec

2005

Jan-Dec

2004

Ventilation 64 35 223 156

Profile 125 77 356 263

Other activities -15 -15 -26 -35

One-time items - - 7 -

Total 174 97 560 384

Sales by market, MSEK

Oct-Dec

2005

Oct-Dec

2004

Jan-Dec

2005

Jan-Dec

2004

The Nordic region 786 711 2 945 2 752

Western Europe 454 317 1 497 1 299

Central and Eastern Europe 527 290 1 432 1 089

USA 68 66 277 309

Other 19 3 63 28

Total 1 854 1 387 6 214 5 477

Sales by marketRolling 12 month

Operating profi t (EBITA)Rolling 12 month


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Western Europe

Central and Eastern EuropeUSA

The Nordic region

Air duct systems

OtherMachinery

Indoor climate/Comfort

Ventilation business area

• Sales for comparable units amounted to SEK 841 million during the quarter, an increase of 10 percent• Operating profi t (EBITA) rose by 83 percent to SEK 64 million• The work of rationalising the production set-up continues

Sales and marketFourth quarter sales grew by 9 percent to SEK 841 million (773 million). Adjusted for

the divestment of Inatherm B.V. sales rose by 10 percent. In general demand has

grown steadily throughout the year. Demand in the Nordic countries continues to be

positive. Sales in the Western European market have stabilised, while the Central and

Eastern European markets continue to grow. Sales in the USA remain unchanged.

Annual sales in 2005 amounted to SEK 3,241 million (3,121), which was an increase

of 4 percent.

ResultsFourth quarter operating profi t amounted to SEK 64 million, an increase of 83 per-

cent compared to the previous year. The improvement in profi ts is partly attributable

to improved demand, above all in the Nordic market, but also to an increased focus

on the core product, circular ducts. Cost levels have been gradually reduced through

continued production rationalisation. The operating profi t excluding the restructuring

reserve of SEK 40 million rose to SEK 223 million (156 million) for the full year 2005.

Sales per quarter

Share of net sales per

product segment

Sales by market

Rolling 12 month

Oct-Dec

2005

Oct-Dec

2004

Jan-Dec

2005

Jan-Dec

2004

Sales (MSEK) 841 773 3 241 3 121

Operating profit (MSEK) 64 35 223 156

Operating margin (%) 7,6 4,5 6,9 5,0

Number of employees 2 120 2 364

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20052004

Building systems

Building componentsOther

Profi le business area

• Sales during the quarter amounted to SEK 993 million, an increase of 65 percent• Operating profi t rose to SEK 125 million (77 million), an increase of 62 percent• Astron Buildings is making better progress than expected

Sales and marketSales during the fourth quarter rose by 65 percent. The acquisition of Astron Build-

ings contributed considerably to the increase in sales. Nevertheless, the underly-

ing business also made positive progress. Sales for comparable units rose by 22

percent. Trends are positive in Northern and Central Europe. Annual sales in 2005

amounted to SEK 2,905 (2,226 million), which was an increase of 30 percent. For

comparable units the increase was 13 percent.

ResultsOperating profi t for the fourth quarter amounted to SEK 125 million, an increase of

62 percent. The improved profi ts stem from an increase in volume and the acquisi-

tion of Astron Buildings.

Sales by market

Rolling 12 month

Sales per quarter

Oct-Dec

2005

Oct-Dec

2004

Jan-Dec

2005

Jan-Dec

2004

Sales (MSEK) 993 601 2 905 2 226

Operating profit (MSEK) 125 77 356 263

Operating margin (%) 12,6 12,8 12,3 11,8

Number of employees 1 821 1 176

Share of net sales per

product segment


8

Fourth Quarter and Year End Report 2005

Consolidated Income Statement (MSEK)

Oct-Dec

2005

Oct-Dec

2004

Jan-Dec

2005

Jan-Dec

2004

Net sales 1 854 1 387 6 214 5 477

Cost of goods sold -1 324 -988 -4 440 -3 945Gross profi t 530 399 1 774 1 532

Other operating income 12 7 92 35

Selling expenses -215 -172 -746 -673

Administration expenses -161 -122 -484 -448

R & D costs -6 -7 -40 -31

Other operating expenses 14 -8 -36 -31

Operating profi t 174 97 560 384

Amortisation intangible assets -3 - -3 -

Profi t before fi nancial items 171 97 557 384

Interest income 2 3 8 9

Interest expenses -20 -21 -83 -94

Other fi nancial income and expenses 1 - 2 -2

Profi t after fi nancial items 154 79 484 297

Paid tax -28 -27 -140 -95

Deferred tax -3 -3 7 1

Profi t for the year 123 49 351 203

Sale of real estate generated capital gain of SEK 47 million and is included in Other operating income for the full year.

Amortisation intangible assets refers to surplus value for the Group.

9

Consolidated Balance Sheet (MSEK)

2005-12-31 2004-12-31

Assets

Intangible fixed assets 2 512 2 026

Tangible fixed assets 1 527 1 393

Financial fixed assets 9 28

Financial fixed assets, interest-bearing 54 25

Other long-term receivables 315 29

Stock 875 1 024

Other receivables 1 070 864

Other receivables, interest-bearing - 4

Cash and bank 244 117

Total assets 6 606 5 510

Shareholders´ equity and liabilities

Shareholders´ equity 2 853 2 369

Interest-bearing provisions 153 85

Non interest-bearing provisions 303 144

Long-term liabilities

Interest-bearing liabilities 1 674 1 738

Current liabilities

Interest-bearing liabilities 325 182

Non interest-bearing liabilities 1 298 992

Total shareholders´ equity and liabilities 6 606 5 510

Preliminary acquisition analysis for Astron Buildings S.A. has been established. The acquisition analysis will be fi nalised

during the fi rst quarter of 2006. The acquisition increased intangible assets by SEK 409 million, of which SEK 362 million

is goodwill and SEK 47 million is brand.


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Consolidated Cash Flow

Consolidated Statement of changes in shareholders´ equity 2005

Oct-Dec

2005

Oct-Dec

2004

Jan-Dec

2005

Jan-Dec

2004

Operating activities

Operating profit 171 97 557 384

Depriciation and amortisation 50 43 194 185

Cash fl ow from operations 221 140 751 569

Financial items -17 -20 -73 -88

Paid tax -31 -30 -133 -95

Cash fl ow from opertaing activities before change in working capital

173 90 545 386

Change in working capital 317 219 143 38

Cash fl ow from operating activities 490 309 688 424

Investments, net -149 -59 -669 -149

Cash fl ow after investing activities 341 250 19 275

Other items -25 -12 -15 4

Net cash fl ow 316 238 4 279

Change in interest-bearing liabilities -261 -245 123 -382

Change in liquid funds 55 -7 127 -103

Equity relating to

parent company´s

shareholders

Minority interest Total equity

Opening balance 2 367 2 2 369

Change of minority interest -2 -2

Premium for managements´options 1 1

Translation differences 134 134

Net profit for the year 351 351

Closing balance 2 853 0 2 853

11

Important differences compared with previous accounting policies

Reconciliation of shareholders’ equity as per December 31, 2004 between Swedish GAAP and IAS/IFRS

Closing balance, Swedish GAAP 2 311

Goodwill 126

Financial leasing -67

Reclassification of minority interest 2

Adjustment of pensions -3

Closing balance, IAS/IFRS 2 369

New accounting policies – the IAS/IFRS – will be

applied from 1 January 2005, the main impact

on Lindab being that goodwill amortisation

according to plan may no longer be applied.

Goodwill items will be tested each year, as

previously.

The reporting of company acquisitions (IFRS 3),

intangible assets (IAS 38) and fi nancial leasing

(IAS 17) are areas of considerable difference

between previous reporting and the IAS/IFRS.

The greatest impact on Lindab has been the

reversal of goodwill amortisation in 2004 to the

tune of SEK 121 million. Financial leasing (IAS

17) has reduced shareholders’ equity by SEK 67

million and increased fi xed assets by SEK 245

million. In Lindab’s 2005 accounts, acquisitions

made during the year have been recognised in

accordance with the new accounting policies.

Financial Instruments and hedge accounting

(IAS 32, IAS 39) have been applied since 1

January 2005, but have had no material impact.

Recompilation of pensions in accordance with

Employee Benefi ts (IAS 19) reduced sharehold-

ers’ equity by SEK 3 million.

In accordance with

Annual Report 2004

Adjustment

IFRS

Annual Accounts in

accordance with IFRS

Net sales 5 477 5 477

Operating costs -4 931 23 -4 908

Operating profit before depreciation and

amortisation EBITDA 546 569

Depreciation -172 -13 -185

Profit before goodwill amortisation EBITA 374 384

Amortisation goodwill -121 121 0

Profit after goodwill amortisation EBITA 253 384

Net financials -74 -13 -87

Profit after financial items EBT 179 297

Minority interests -1 1 -

Tax -95 1 -94

Net profi t for the year 83 120 203

MSEK

In accordance with

Annual Report 2004

Adjustment

IFRS

Annual Accounts in

accordance with IFRS

Intangible assets 1 900 126 2 026Tangible fixed assets 1 148 245 1 393Financial fixed assets 53 22 75Other long-term receivables 29 29Current assets 1 987 1 987Total assets 5 117 393 5 510

Shareholders´ equity 2 311 58 2 369

Minority 2 -2 -

Provisions 226 3 229

Long-term liabilities 1 412 326 1 738

Current liabilities 1 166 8 1 174

Total shareholders´equity and liabilities 5 117 393 5 510

MSEK

Consolidated Income Statement and Balance Sheet according to Swedish GAAP compared to IAS/IFRS

Lindab Intressenter ABSE-269 82 Båstad

Date for financial reporting for 2006

Interim report January-March, first quarter 11 May 2006

Interim report January-June, second quarter 24 August 2006

Interim report January-September, third quarter 10 November 2006

This report has not been audited by Lindab´s auditors.

Contacts

Kjell Åkesson, CEO

Phone 0431-850 00

e-mail [email protected]

Nils-Johan Andersson, CFO

Phone 0431-850 00

e-mail [email protected]

For more information please visit www.lindab.com

Subscribe to our customer magazine, Lindab Direct, press releases, annual reports

and interim reports.

Phone +46 (0) 431 850 00

Telefax +46 (0) 431 850 10

E-mail [email protected]

www.lindab.com

Lindab Intressenter AB with headquarters in Båstad

Org.Reg.No. 556606-5446

Fourth Quarter and Year End Report 2005

Documents

Transcript of Fourth Quarter and Year End Report 2005